The role of private sector in APEC forum

The role of private sector in APEC forum

By Lee Tsao Yuan

SINGAPORE (JP): A distinctive feature of economic dynamism
in the Asia Pacific is that it is driven by the private sector.
Thousands of businesses have taken advantage of the progressive
lowering of trade barriers and of the relaxation of investment
deregulation to engage in regional activities ranging from
assembly-line manufacturing to sophisticated financial services.

Strategic alliances, franchising agreements, subcontracting
relationships and other forms of business partnerships are being
forged across country boundaries, either for home or third
country markets. The larger business corporations, comprising not
only the first-tier global players from the US, Europe and Japan
but also increasingly those from developing Asia, have already
integrated business activities which span the Asia Pacific. These
companies perform a valuable function in contributing towards
economic integration, while at the same time enhancing cross-
cultural communication and understanding, and helping to
establish a community of Asia Pacific economies.

The Economic Leaders established the Pacific Business Forum
(PBF) in November 1993, and asked the group of business leaders
to "identify issues APEC should address to facilitate regional
trade and investment and encourage the further development of
business networks throughout the region." The 33-member PBF met
three times this year, and presented their report to President
Soeharto, the current Chairman of APEC, in October 1994. The PBF
report is aptly titled "A Business Blueprint for APEC :
Strategies for Growth and Common Prosperity".

There are four key areas discussed in the report. The first
area is trade and investment liberalization, to be completed by
the year 2002 for developed economies and 2010 for developing
economies. This ambitious time-table reflects the urgency that
the PBF accords this task, and their concern that the
accomplishment of this not be so distant that "it will be
irrelevant to the current agenda of the business community". In
recognition of the importance of investment flows and the
existence of many barriers to foreign investment, the PBF
recommends the adoption of an investment code, the incorporation
of elements of the code into domestic investment laws where
appropriate and the development of a legally enforceable and
binding code as soon as possible. Not least is the recommendation
of an immediate standstill on all new barriers to trade and
investment.

The second area is business facilitation. Recommendations
include making transparency in regulatory and administrative
regimes a priority; expediting customs processing and visa
applications; harmonization of product standards; establishment
of APEC dispute settlement mechanisms and implementing sound
business ethics.

The third area comprises human resources and business
development policies. There is recognition of the need to
encourage greater participation by small and medium enterprises
(SME) in regional business activities, such as by fostering
linkages between large enterprises and SMEs; developing local
supporting industries; and encouraging technological cooperation
among SMEs by offering administrative and fiscal incentives.
Infrastructure development, including the establishment of an
information infrastructure, should proceed on a region-wide
basis, for example, by formulating a regional infrastructure,
with inputs from both public and private sectors.

The fourth area is the importance of enhanced cooperation
between government and the business sector. In particular, the
PBF recommends the establishment of an APEC Business Advisory
Forum as a means of continuing the dialog between the APEC
Economic Leaders and the business community. The contribution of
existing regional business networks, such as the Pacific Economic
Cooperation Council, Pacific Basin Economic Council, CACCI and
Asia Pacific Business Network is explicitly recognized, both in
fostering closer personal and corporate relationships, and in
contributing to the formation of government policy.

It is timely that APEC, an inter-governmental organization,
not only acknowledges the important role played by the business
sector in the Asia Pacific economy, but has also asked the
business community for recommendations as to how governments can
facilitate regional trade and investment. It is to be hoped that
business sector inputs, from the PBF as well as other regional
business organizations, are indeed taken seriously by APEC
governments. This would make for a viable partnership, in order
to achieve growth and common prosperity in the Asia Pacific.